West Virginia: Based & Nukepilled???
crushing ESG and paving the way for nuclear
West Virginia struck a blow against woke capital this week. On Monday, the State Treasurer of West Virginia, Riley Moore, announced that WV’s Board of Treasury Investments will cease to use BlackRock’s fund as part of its investment portfolio. Why? Because BlackRock CEO Larry Fink has aggressively pushed for net-zero ESG (Environmental Social Governance) investments, which poses a direct threat to oil, gas, and coal.
Climate hawks might take issue, but let’s take a look at West Virginia’s energy profile. Here’s the quick and dirty from EIA:
In 2020, West Virginia was the second-largest coal producer in the nation, after Wyoming, and accounted for 13% of U.S. total coal production. West Virginia also had 12% of recoverable coal reserves at producing mines, the third-largest reserve base in the nation, after Wyoming and Illinois.
In 2020, coal-fired electric power plants accounted for 88% of West Virginia's electricity net generation. Renewable energy resources—primarily hydroelectric power and wind energy—contributed almost 6% and natural gas provided more than 3%.
In 2020, West Virginia was fifth in the nation in natural gas marketed production. The state produced nearly 2.6 trillion cubic feet of natural gas, about 10 times more than in 2010, and 95% of it was from shale wells.
West Virginia’s total crude oil production reached an all-time high of 20 million barrels in 2020, more than 10 times greater than a decade earlier. Much of that production comes from recent drilling in the state’s northern panhandle.
Couple this with something Chairman Mark Christie from the Federal Energy Regulatory Commission (FERC) state told the Senate Energy Committee last year. If WV were to replace their coal fleet with variable renewables like wind and solar, problems would arise: a reliability problem and a cost problem. That’s because West Virginians would continue to pay for inoperable coal plants already built into their base rate on top of paying for new variable renewable energy (VREs. Not to mention the job loss--VRE jobs can’t replace coal jobs in either amount or pay. Is it reasonable to ask West Virginia to commit economic suicide?
Some might say that WV is a tiny state, so who cares? Just bully them into submission. We have to save the planet, after all. Flyover country be damned! I doubt someone like that would listen to reason, but ESG’s misguidedness should concern people who don’t live in WV, too.
ESG suffers from the same problem utopian climate legislation does. First, ESG commitments won’t reduce emissions so much as subsidize other countries’ emissions. C. Boyden Gray, policy expert and former ambassador to the EU, puts it like this:
If the United States agrees to bear a disproportionate share of the cost of mitigating climate damages, this will reduce the need of foreign countries to curb their own emissions. Put bluntly, disproportionate U.S. mitigation policies compared to the rest of the world are a form of foreign aid that enlarges China and India’s “carbon budgets.”
Secondly, ESG makes us reliant on foreign governments for our energy. It’s prohibitively expensive to produce renewables like wind and solar here. And since there are not currently, to my knowledge, any utility-scale wind and solar buildouts manufactured using strictly renewable energy, building them would be even more expensive under ESG standards. And since it’s highly, highly unlikely that ESG proponents would allow the expansion of the domestic American capability to meet the critical minerals needs of their demands, we’d be dependent on other countries for access to them, especially China.
In fact, Treasurer Moore pointed out the same thing in the press release. We can’t hobble our country to help the climate.
Which brings me to the third reason to fight ESG: massive renewables buildouts fragilize the grid. No matter what the modelers say, massive increases in power generators that do not and cannot run most of the time creates serious problems for reliability. We’re talking about the actual grid here--not the “could” grid. Adopting the anti-reliability standards that ESG demands would create sustained energy austerity. Put another way: it would mean financiers and bureaucrats mounting a prolonged assault on working Americans’ ability to keep their lights on. No thanks.
So, what do we do?
Well, go nuclear, of course. Sen. Joe Manchin (WV) has made it abundantly clear that he supports nuclear. In a letter to Biden last year, Manchin wrote, “As a zero-emissions baseload fuel source, I believe that maintaining our [nuclear] fleet and preventing closures of existing nuclear plants is critical to achieving emission reduction goals and ensuring a reliable grid.” To boot, West Virginia has a massive coal fleet ripe for replacement with nuclear as parts of it retire—which, unlike VRE buildouts, would grow rather than destroy the coal workforce. Unfortunately for WV, it has a moratorium on building new nuclear reactors.
But there’s hope: last week, WV’s Senate President Craig Blair publicly spoke of his desire to bring nuclear to his state and repeal the nuclear moratorium. Brief and beautiful legislation has already been introduced to this effect. Given that it seems to have broad support in the state government, it looks likely to pass. A senate committee has already advanced the bill. The state wants nuclear, and it wants it now.
West Virginia shows us a way forward: how to decarbonize while maintaining American flourishing and American energy sovereignty. This is a great sign. But before we get too big for our britches, we should put this into perspective: BlackRock deals in trillions, the WV treasury in a few billion. A bigger fight against Larry Fink and Wall Street needs to be waged. And lifting a nuclear moratorium at the state level isn’t the same as a national nuclear buildout to replace retiring coal. Or to rework the NRC. We need federal action, but the fact that we’re seeing some at the state level makes the former more possible.